For users of a network-based transaction facility, a reliable and convenient payment mechanism is particularly important for enhancing user trust in the transaction facility. A typical network-based transaction facility, however, does not ensure the expedient and secure completion of payment transactions. Instead, payment transactions between traders of an online trading community are typically conducted in a conventional, time-consuming manner using paper checks and money orders. Accordingly, such payment transactions delay payments to sellers and delivery of purchased goods to buyers. In addition, sellers are expected to bear the risk of bounced checks and buyers are running the risk of not receiving the goods after sending the money.
The above problems are typically faced by individuals or small businesses who cannot afford to build or buy the infrastructure to accept credit card payments from buyers in the network-based transaction facility. However, even a seller who does accept credit card payments can still lose those buyers who appreciate the convenience of online payments but do not have access to credit cards. In addition, a buyer may prefer not to disclose his or her credit card information over the Internet in general, or to a certain seller in particular. Further, credit card payments may not always be desirable for sellers because of their charge back recourse to buyers.
Therefore, it will be advantageous to provide traders with an efficient and secure mechanism for facilitating online payment transactions via a variety of payment instruments.